Former Attorney Sentenced In 'Ambulance Chasing' Case

It began six years ago with a staged automobile accident. It ended Thursday with a 51-month prison sentence. Along the way, the FBI gave the world a peek at the seamy side of personal injury law in Connecticut.

Authorities said the man sentenced Thursday, former personal injury attorney Joseph P. Haddad, collected on millions of dollars in fraudulent insurance claims using a network of collaborators that included medical doctors, chiropractic and diagnostic clinics and a platoon of "runners" who were paid hundreds of thousands in cash to deliver accident victims.

Haddad, according to admissions by six others convicted in the scheme, signed up clients and delivered them to the network. Accident victims were diagnosed, often without examination. Their insurers were billed for nonexistent appointments. They were prescribed powerful pain killers, solely to make it appear they had suffered serious and painful injuries. Unnecessary treatments continued for months so Haddad could establish claims for permanent disabilities.

Much of the evidence against Haddad, 65, was developed during a yearslong investigation — dubbed Operation Running Man — involving an undercover FBI agent. After obtaining coverage from a cooperating insurance company – the Travelers – and staging a minor collision in December 2008, the agent allowed himself to be directed Haddad's Bridgeport law firm by a runner who identified him from an accident report.

The undercover agent secretly recorded thousands of conversations, such as one in which Haddad scolds him about prescription medications. Haddad told the agent to get rid of a muscle relaxer he was taking and instruct his physician to replace it with something stronger – even if the agent had no intention of taking the new medication.

"OK, um, between you and me," Haddad said on the recording. "I would, I'd tell her this didn't work ... [pointing to a prescription for Cyclobenzaprine, a muscle relaxant] … get something stronger even if you don't take it. All right, remember what I told ya, tell them it ain't working. You need something stronger for the pain."

"All right, cool," the agent replied.

"The more you complain," Haddad said, "the more money you get."

"All right," the agent said. "That's what I'm talking about."

At another time, by accident in an office lobby, the agent encountered one of the physicians in Haddad's unofficial network, an unlicensed Bridgeport medical doctor named Francisco Carbone. Carbone lost his right to practice in Connecticut because of a conviction for a health care crime. The two exchanged pleasantries and, after less than one minute, parted company.

"Thereafter," according to a prosecution document, "Carbone submitted a health insurance claim form to Metropolitan Insurance … charging $380 for that chance encounter and representing that various medical services had been provided when they had not."

The federal agent submitted to a year of treatment. Among other things, he was billed for 11 chiropractic examinations – even though he saw a chiropractor only four times. The agent told Haddad he wanted to settle for $4,300 – money available after Haddad and others had taken cuts from the insurance coverage. The agent settled even though Haddad said he was willing to press on for a greater amount.

As he was about to sign for his check, the agent mentioned that his cousin had just been involved in an automobile accident. Haddad perked up, a recording suggests. He promised to add $300 to the agent's settlement if his cousin retained Haddad's firm. Records in the case show that $300 was typically what Haddad paid runners for delivering victims.

Federal prosecutors played what amounted to a highlight reel from the recordings at the hearing Thursday in U.S. District Court in Bridgeport, where Judge Stefan Underhill sentenced Haddad. In addition to a prison sentence, Underhill imposed a $25,000 fine and ordered Haddad to pay about $1.8 million in restitution to insurers.

Haddad, of Orange, previously pleaded guilty to insurance fraud and conspiracy and, before he was sentenced, surrendered his law license.

"For years, attorney Haddad operated a well-oiled fraud machine designed to bilk millions of dollars from automobile insurance companies," said Patricia M. Ferrick, the special agent in charge of the FBI's Connecticut office. "Today, he learned that his long-running scheme has earned him 51 months in federal prison. Lawyers, doctors, chiropractors and other licensed health care professionals can earn substantial incomes without having to steal."

The amount Haddad was ordered to pay in restitution was an insurance loss estimated by the government and Haddad's lawyer, John R. Williams, for the purpose of deciding on punishment. Prosecutors called the estimate conservative.